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Axis Bank Launches Digital Merchant Cash Advance Loans for MSMEs, Offers Up to Rs 20 Lakh

Axis Bank has launched a fully digital Merchant Cash Advance loan product for micro and small businesses, offering unsecured credit from Rs 2 lakh to Rs 20 lakh. The loan uses cash-flow intelligence for underwriting and features a repayment model with small daily instalments linked to a business's sales. The bank states this initiative aims to provide faster, more accessible credit to MSMEs that may lack traditional collateral or financial documentation.

Key Points: Axis Bank Unveils Digital Merchant Cash Advance Loans for MSMEs | Up to Rs 20 Lakh

  • Axis Bank launches digital loan product for MSMEs
  • New service offers unsecured loans from Rs 2-20 lakh using cash-flow data
  • Loan features daily repayment instalments linked to sales
  • Product aims to help merchants lacking collateral or formal financial records
  • Bank promises credit decision in minutes and disbursal in days
  • Initiative reinforces bank's data-driven lending strategy for small businesses
3 min read

Axis Bank launches digital merchant cash advance loans for MSMEs, offering unsecured loans ranging up to Rs 20 lakh

Axis Bank launches first-of-its-kind digital merchant cash advance loans for MSMEs, offering unsecured credit from Rs 2-20 lakh based on cash flow, with daily repayment instalments.

"Digital Merchant Cash Advance Loans bring instant credit facility and current accounts together into one seamless, digital solution, supported by flexible daily repayments aligned to merchants' business needs. - Vijay Shetty / President & Head, Commercial Banking Group, Axis Bank"

New Delhi, December 23

Axis Bank launches Digital Merchant Cash Advance Loans for MSMEs. According to a release from Axis Bank, this new service provides unsecured loans to micro and small businesses across the country. These loans range from Rs 2 lakh to Rs 20 lakh. This is the first of its kind in the industry and focuses on the daily cash flow of a business. It is designed to help small merchants, like retail shops, get the money they need quickly for their daily work.

The bank uses a fully digital process to decide who can get a loan. Instead of looking at traditional financial papers or old statements, the bank uses cash-flow intelligence and other digital data to check eligibility.

This system allows merchants to get a credit decision in just a few minutes after they apply. Once the bank approves the loan, the money is sent to the merchant within a few days. The bank also provides current account services to these customers to make the entire process smooth from start to finish.

The repayment system is built to help small shops manage their money without stress. Merchants do not have to pay large monthly amounts. Instead, the bank collects repayments through small everyday instalments. This means the payments are linked to the actual daily sales of the shop. This Everyday Instalment (EDI) model gives merchants more flexibility and helps them keep enough money in their business for daily needs. It ensures that the business stays stable while the loan is being paid back.

Vijay Shetty, President and Head of the Commercial Banking Group at Axis Bank, said, "Digital Merchant Cash Advance Loans bring instant credit facility and current accounts together into one seamless, digital solution, supported by flexible daily repayments aligned to merchants' business needs." He also explained that the bank wants to use data to help more small businesses get the funds they require. He said, "By leveraging cash-flow-based underwriting, we aim to make timely funding more accessible for MSMEs."

This new service helps businesses that often find it hard to get formal credit because they do not have property to give as a guarantee. It also assists those who may not have traditional financial records. Axis Bank aims to reach more small businesses across India by offering this fast and reliable way to get credit.

Shetty added, "This launch is a significant step in advancing our data-driven lending and reinforcing our commitment to empower India's MSMEs with simple, fast and reliable credit." Merchants who are interested in the Merchant Cash Advance can visit their nearest Axis Bank branch or check the bank's website for more details.

- ANI

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Reader Comments

P
Priyanka N
Finally, a bank is thinking about the real problems of MSMEs. Most of us run our businesses on cash flow, not balance sheets. Using digital data instead of old paperwork makes so much sense. Axis Bank seems to have done its homework.
A
Aman W
Sounds promising, but the devil is in the details. What is the actual cost of this credit? "Daily instalments" sound flexible, but the total interest paid might be high. They should be transparent about the APR upfront on their website.
S
Sarah B
As someone who works with small businesses, this is a much-needed innovation. The lack of collateral has been the biggest barrier to formal credit for kirana stores and small vendors. A fully digital process can really speed things up in tier 2 and 3 cities.
V
Vikram M
Good step for financial inclusion. My uncle has a small electrical shop and always struggles for working capital during the off-season. This model, where repayment matches daily sales, could be a lifesaver for businesses with seasonal fluctuations.
K
Karthik V
Hope other banks follow suit. MSMEs are the backbone of our economy but get the least support from formal banking. A few minutes for credit decision? That's what I call 'ease of doing business'! 👍

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